Key Summary
- South Korea has arrested five people, including "Eth Father," the mastermind behind DEX Rug Pull, for the first time under the Virtual Asset User Protection Act.
- The CATFI token on Pump.Fun surged 1,001 times in 26 hours, causing 256 investors to lose approximately 900 million Korean won (US$586,000).
- A criminal syndicate used only about 10 million won of principal to siphon off 400 million won in illicit profits, extending regulatory oversight from centralized exchanges (CEXs) to digital exchanges (DEXs).
Leveraging 10 million Korean won to generate 400 million Korean won in returns—a 40x return. This isn't some new DeFi strategy; it's from the Seoul Southern District Prosecutors' Office indictment.
The Joint Investigation Department for Virtual Asset Crimes of the Seoul Southern District Prosecutors' Office announced the arrest and indictment of two ringleaders suspected of "market manipulation," while another person was indicted without detention. Two others were charged with assisting the ringleaders in their escape. The ringleader, identified as Park, operated under the online influencer "Eth Father" on Crypto Twitter. In early 2025, he created the CATFI token on the Pump.Fun platform within the Solana ecosystem, listed it on a decentralized exchange, and then absconded with the funds.
The driving force behind the 26-hour surge of a thousandfold
Park promoted CATFI by releasing false positive information and buying followers, and used multiple wallets to disperse holdings and loop trading to cover up the fact that the token was under his control.
The price of CATFI surged 1,001 times within 26 hours of its release, attracting approximately 6,000 investors. After the main suspect dumped the shares, reducing the value to zero, 256 investors lost approximately 900 million won (about US$586,000). Prosecutors stated that the group used approximately 10 million won (about US$6,500) in illicit funds to obtain approximately 400 million won in illegal profits.
This is the first case in South Korean judicial history where 98% of the tokens on Pump.Fun have been classified as Rug Pulls or fraud.
From CEX to DEX, South Korea's regulatory reach extends.
This case marks the first time South Korea has enforced the Virtual Asset User Protection Act, which came into effect in July 2024, against criminal activity on a decentralized exchange (DEX). Previously, South Korea handled its first centralized exchange price manipulation case under the same law in January 2025. The prosecution's jurisdiction is expanding from centralized exchanges (CEXs) to decentralized exchanges (DEXs).
Prosecutors stated they will "resolutely address actions that disrupt the digital asset market and undermine public trust." This case could become a key precedent in South Korea's handling of Meme coin fraud, social media promotion, and DEX trading under virtual asset law. South Korea has also been continuously strengthening its regulations recently, including requiring financial influencers to disclose their holdings and paid promotion information.
Frequently Asked Questions
Why is the South Korean CATFI case important?
This marks the first time South Korea has prosecuted a Rug Pull operation on a decentralized exchange (DEX) under the Virtual Asset User Protection Act, signifying a shift in regulation from centralized exchanges to DEXs and potentially becoming a key precedent in handling Meme coin scams.
What are the common scams involving CATFI tokens?
After creating CATFI on Pump.Fun, the mastermind used false positive news and purchased followers to promote it, and concealed control through multi-wallet loop transactions. The token surged 1,001 times in 26 hours before crashing, resulting in losses of approximately 900 million Korean won for 256 investors.
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